Abela & Ors v Baadarani

A contractual agreement conferring jurisdiction on the English courts will ordinarily make England the proper forum, even where proceedings have begun abroad and the claimant has delayed, unless there is an extremely strong contrary argument. The defendant must be protected from being doubly vexed.

The court has jurisdiction to order alternative service outside the jurisdiction, including retrospectively, but the power is exceptional and must be exercised cautiously. Retrospective validation will usually be inappropriate where the method was unauthorised and invalid under local law. A claimant must prove local-law validity and a genuine good reason. Avoiding limitation caused by delay is insufficient. A general power of attorney, receipt and retention of papers did not establish acceptance of service.

The claimants sought to bring proceedings for fraudulent misrepresentation and conspiracy concerning a share purchase agreement governed by English law and containing a non-exclusive jurisdiction agreement. The first defendant was resident in Lebanon, where related civil and criminal proceedings had been commenced. The English claim form was issued close to the limitation deadline.

The High Court permitted service out of the jurisdiction, extended the validity of the claim form and retrospectively treated service on the defendant’s Lebanese lawyer as good service. It rejected challenges based on the absence of a real issue, limitation and forum. The appeal concerned whether England was the proper place and whether service on the lawyer could be validated under English and Lebanese law.

1. Disposition. Lord Justice Longmore delivered the judgment, with Lord Justice McFarlane and Lady Justice Arden agreeing. The appeal was allowed, the order declaring service on the defendant’s Lebanese lawyer to be good service was set aside, and the action was to be dismissed. The challenges concerning the real issue and limitation points were rejected.
2. England as the proper place. Where parties have agreed that proceedings may take place in England, England will be the proper forum unless there is an extremely strong argument to the contrary. Foreign proceedings might theoretically provide such an argument, but here the undertaking not to pursue the Lebanese civil proceedings, the absence of one claimant from those proceedings and the continuation of the claim against the second defendant in England provided compelling reasons. The agreement should be upheld despite delay, provided the defendant is protected from double vexation.
3. Alternative service. The court accepted that, under the Civil Procedure Rules 1998, CPR 6.37(5)(b)(i) permits directions about service out of the jurisdiction and supports orders under CPR 6.15(1), including retrospective orders under CPR 6.15(2). The decision in Cecil v Bayat [2011] 1 WLR 3086 had settled that jurisdiction, as recognised in Bacon v Automaytic Inc [2011] 2 AER Comm 852. Nevertheless, the power is exorbitant, exceptional and must be exercised cautiously.
4. Local-law validity and evidence. The claimants bore the onus of proving that the method used was good service under Lebanese law. The general power of attorney did not authorise the lawyer, without further instructions, formally to accept foreign proceedings. His receipt and retention of the documents did not amount to acceptance, and the requirements identified in Article 400 of the Lebanese Code of Civil Procedures were not satisfied.
5. Good reason and extensions. An ineffective attempt at a permitted method of service may in principle constitute a good reason for alternative or retrospective service, but the evidence of residence and attempted service was inadequate. Avoiding limitation, where the difficulty resulted from issuing the claim form late, was not a good or exceptional reason. Applying Hashtroodi v Hancock [2004] 1 WLR 3206, the weak reasons for extending the claim form made the extensions granted by Sales J and Lewison J inappropriate.

1. Court of Appeal (Civil Division). In [2011] EWCA Civ 1571, the appeal was allowed. The retrospective validation of service was set aside and the action was to be dismissed.
2. High Court of Justice, Chancery Division. In [2011] EWHC 116 (Ch), Sir Edward Evans-Lombe treated service on the defendant’s Lebanese lawyer as good service retrospectively and rejected objections concerning the real issue, limitation and forum.